Spring Budget 2021: Sunak freezes lifetime allowance for pensions contributions

IHT threshold also held at current levels

Chancellor Rishi Sunak has frozen the lifetime allowance (LTA) for pension contributions at just over £1m for the remainder of this Parliament.

The Chancellor said the LTA would remain at its current level of £1,073,100 for 2020/21 rather than increasing in line with inflation. It had been expected to rise by £5,800 in 2021/22, in line with 0.5% Consumer Prices Index.  The IHT threshold will also be held at current levels until April 2026. In a widely predicted move - it was leaked last week - the freeze is estimated to net the Treasury an additional £250m in tax.  If the lifetime allowance rose alongside inflation it would increase by a further £88,900 by the end of the current parliament. It is thought medium to high ...